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Originally Posted by Dirty Harry
Or maybe the 2nd gen will have a shortened lifecycle, if what you’re saying is correct. Can’t imagine it being a 10 year lifecycle like the first gen if they don’t sell etc.
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I have worked for four Tier One parts manufacturers over the last 30 years and there are some very distinct patterns that do not change much no matter what company the parts were for.
The contracts are usually for 3 years. This may vary a bit but will never be under that. It is incredibly expensive to change equipment over for new products so the suppliers need contracts that long to ensure they are going to make money. This is why you usually see only small changes for several years in any vehicle. If they move forward with the second gen you can be pretty sure it will run for at least those 3 years. The Aztec is a great example of this. They knew in the first year that it was a total flop and still kept building them until the contracts were up. It is rumoured that in the last year they built and then crushed more than they sold.
The car companies are always looking for small changes even during a contracted run. Some changes they pay more for as an addendum to the contract but rarely do they pay less. Almost all of the contracts include a requirement that the ordered parts go DOWN in price over the 3 year period! This can be tricky since the costs to make them invariably go up.
The development of new parts can take two or MORE years! It takes an incredible amount of time all for a part to go through all the different departments of both the car company and the parts maker. It is almost impossible to imagine the time even a simple washer can take. This process trickles down to the places that make the materials that are used to make the parts that make the parts.
All n all there is far far more to it that somebody saying "OK we will make this car now go online and get what we need" so if they are already committed they will build the car. If it is early enough they will cancel it. If it is going to be about a break even to build and not sell any than it is to cancel the contracts they may may decide to take the loss and not move forward.
We shall see.